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• Free Cash Flow: $5.75 per share or $137.9 million.

• Shareholder Returns: $68.6 million in share buybacks and dividend payments.

• Debt Repayment: $79.5 million of long-term debt repaid.

• Net Location Growth: Net increase of 13 restaurants in Q4.

• System Sales: Flat at over $5.6 billion for fiscal 2024.

• Digital Sales Growth: 9% increase to $1.1 billion, representing 20% of total sales.

• Total Locations: 7,079 locations, with 96.4% franchised or under operator agreements.

• Normalized Adjusted EBITDA: $59.4 million in Q4, a decrease of 1.6% from the previous year.

• Franchising Margins: Increased from 47% to 51% year-over-year.

• Corporate Restaurant EBITDA: Decreased by 39% in Q4.

• Retail Distribution and Manufacturing EBITDA: Decreased by 12% for fiscal 2024.

• Impairment Charges: $64.6 million on tangible and intangible assets.

• Net Loss: $55.3 million or $3.34 per diluted share in Q4.

• Net Debt: $656 million, reduced by over $52 million from the previous year.

• Debt-to-EBITDA Ratio: Approximately 2.5 times.

• Warning! GuruFocus has detected 8 Warning Signs with MTYFF.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MTY Food Group Inc (MTYFF) achieved a net positive location growth for the first time in 10 years, with a net addition of 13 restaurants in the fourth quarter.

• The company returned a record amount to shareholders through share buybacks and dividend payments totaling over $68.6 million.

• MTY Food Group Inc (MTYFF) paid back over $79.5 million of its long-term debt, strengthening its balance sheet.

• Digital sales grew by 9% year-over-year, reaching $1.1 billion, and now represent 20% of total sales, indicating a significant growth opportunity.

• The franchising segment showed strong performance with margins increasing from 47% to 51%, contributing to a 7.9% increase in normalized adjusted EBITDA year-over-year.

Negative Points

• Normalized adjusted EBITDA decreased by 1.6% in the fourth quarter compared to the previous year.

• The corporate restaurant segment faced challenges, with a 39% decrease in EBITDA due to margin pressures and sales declines in certain concepts.

• A non-cash impairment charge of $64.6 million was recorded due to underperformance of certain recently acquired corporate locations and intangible assets.

• The company reported a net loss attributable to owners of $55.3 million in the fourth quarter, primarily due to impairment charges and foreign exchange variations.

• Retail distribution and manufacturing segments struggled, with a 12% decrease in normalized adjusted EBITDA compared to the prior year, as customers shifted to discount brands.